Attaining global growth and improved efficiency Toyota Motor Corporation October 21, 2003 1
Cautionary Statement with Respect to Forward-Looking Statements This presentation contains forward-looking statements that reflect Toyota’s plans and expectations. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that may cause Toyota’s actual results, performance, achievements or financial position to be materially different from any future results, performance, achievements or financial position expressed or implied by these forward-looking statements. These factors include: (i) changes in economic conditions affecting, and the competitive environment in, the automotive markets in Japan, North America, Europe and other markets in which Toyota operates; (ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar, the euro and the British pound; (iii) Toyota’s ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management; (iv) changes in the laws, regulations and government policies affecting Toyota’s automotive operations, particularly laws, regulations and policies relating to environmental protection, vehicle emissions, vehicle fuel economy and vehicle safety, as well as changes in laws, regulations and government policies affecting Toyota’s other operations, including the outcome of future litigation and other legal proceedings; (v) political instability in the markets in which Toyota operates; (vi) Toyota’s ability to timely develop and achieve market acceptance of new products; and (vii) fuel shortages or interruptions in transportation systems, labor strikes, work stoppages or other interruptions to, or difficulties in, the employment of labor in the major markets where Toyota purchases materials, components and supplies for the production of its products or where its products are produced, distributed or sold. A discussion of these and other factors which may affect Toyota’s actual results, performance, achievements or financial position is contained in the “Operating and Financial Review and Prospects” and “Information on the Company” sections and elsewhere in Toyota’s annual report on Form 20-F, which is on file with the United States Securities and Exchange Commission. 2
Fujio Cho President Toyota Motor Corporation 3
Agenda Part Ⅰ TOYOTA NOW Global Manufacturing and Marketing in 2002 Part Ⅱ TOYOTA NEXT a. Sales Strategy – Regional Strategies: North America, Europe, Asia, China, and Japan b. Building Global Development and Optimum Production Systems c. Future Growth through Market Creation Part Ⅲ Financial Strategy 4
Part Ⅰ Part Ⅰ TOYOTA NOW TOYOTA NOW 5
Global Manufacturing and Marketing in 2002 Production and Sales 6,550 Number of vehicles Number of vehicles (thousands of units) (thousands of units) 6,730 6,314 6,167 6,000 4,500 2,570 2,570 4,240 2,570 4,240 764 764 764 2,412 2,412 1,467 1,467 1,467 2,930 2,930 1,779 1,779 3,480 2,175 2,175 2,175 3,949 3,949 1,779 3,480 3,000 ～ ～ 1,500 ～ ～ ～ ～ CY92 CY98 CY00 CY02 Projections for CY03 Overseas production Overseas sales Domestic production Domestic sales * Total units including Toyota/Lexus, Daihatsu, and Hino brands 6
Global Manufacturing and Marketing in 2002 Overseas Production and Operating Income 2,175 (Thousands of units) Exchange rate (yen/dollar) 2,000 1,271 Overseas production volume (calendar year) *1 (Billions of yen) 1,000 131 yen/$ 122 yen/$ 500 ～ ～ ～ ～ ～ ～ 0 FY92 FY94 FY96 FY98 FY99 FY00 FY01 FY02 FY03 650 Operating income(US GAAP*2) *1. Output including Toyota, Daihatsu, and Hino brands *2. FY92-96 : Japan GAAP 7
Part Ⅱ TOYOTA NEXT Part Ⅱ TOYOTA NEXT Attaining global growth and improved efficiency 8
a. Sales Strategy: North America Steadily expanding sales towards the 2 million target Number of vehicles Number of vehicles (thousands of units) (thousands of units) 2,000 2,000 2,000 2,000 1,500 Expanding local production Expanding local production 1,000 500 10.4 * 8.7 8.7 9.3 10.1 * 0 Target for Projection 1998 1999 2000 2001 2002 2003–2004 for 2005 Units manufactured in North America Units imported from Japan * Market share in the US (%) 9
a. Sales Strategy: North America Creating markets through new product launches The U.S. market : Number of vehicles Number of vehicles (millions of units) (millions of units) 15 15 Tundra Double Cab Lexus RX330 (scheduled launch: (from March 2003) fall 2003) 10 Commercial vehicle (light truck) market Commercial vehicle (light truck) market 10 Commercial vehicle (light truck) market Scion (from June 2003) Passenger vehicle market Passenger vehicle market 5 5 No. 1 No. 1 xA in 2002 in 2002 Next-generation Prius passenger passenger vehicle sales vehicle sales (from October 2003) xB Corolla Camry 0 0 1990 2002 1990 2002 10
a. Sales Strategy: Europe Achieving 800 thousand sales target ahead of time Renewal of strategic core models completed European core models Corolla Yaris Number of vehicles Number of vehicles (thousands of units) (thousands of units) Market share (%) Avensis 800 800 800 800 5.0 4.5% 600 3.9% 4.0 3.4% 400 2.9% 2.9% 3.0 200 ～ ～ 2.0 0 Target for 1998 1999 2000 2001 2002 2005 Toyota sales units Market share 11
a. Sales Strategy: Europe Improve products (diesel-powered vehicles) - Expanding lineup for diesel-powered vehicles - Expanding local production of diesel engines - DPNR launch Number of vehicles Number of vehicles (thousands of units) (thousands of units) Diesel Engines 200 Rapid expansion of local production From Jan.03: TMUK 50,000 units TMMF 30,000 units 31%* From 2005: Poland 150,000 units 100 22% 16% ～ ～ 0 1998 2001 2002 DPNR/launch in 2003 DPNR ： Diesel Particulate ＊ Diesel sales ratio Sales units of diesel-powered vehicles - NOx Reduction system 12
a. Sales Strategy: Asia Establish a solid position as a top-brand in major markets → Expand faster than the market Number of vehicles Number of vehicles (thousands of units) (thousands of units) Year-on-year growth (%) 30 400 +26% 300 20 +16% 200 10 100 Market Market Market Passenger share: share: vehicles share: 22% 22% ratio: 47% 22% ～ ～ 0 0 Projection 1998 1999 2000 2001 2002 for 2005 Toyota sales units Year-on-year growth: market Year-on-year growth: Toyota * excluding China 13
a. Sales Strategy: China Manufacturing and marketing to be strengthened in response to market growth Large & Luxury SUV Crown luxury Establish full Land Cruiser/Prado Product lineup product lineup Compact VIOS Establish Daihatsu (compact) Toyota brand Corolla Aggressive introduction of models Aggressive introduction of models Aggressive introduction of models Production capacity 50,000 units/Year Several hundred thousand units/Year 30,000 units/Year 25,000 units/Year → 115,000 units/Year 50, 000 units/Year 2002 2003 2004 2005 2006 2007 2008 2009 2010 14
a. Sales Strategy: Japan Domestic market and Toyota sales Number of vehicles Number of vehicles Toyota’s share: maintaining and Toyota’s share: maintaining and (thousands of units) (thousands of units) Market share expanding high-level over 40% expanding high-level over 40% (%) 4,000 40 2,000 ～ ～ 20 0 Projection 1998 1999 2000 2001 2002 for 2005 Total market excluding minivehicles Toyota’s share (%) 15
a. Sales Strategy: Japan Toyota Sales by Category (excluding minivehicles) Toyota’s share (overall) : January to September, 2003: 42.1 % (+0.1%*) (*changes year-on-year) 76.5 3 Box Large & Luxury 78.6 Celsior Celsior ～ ～ Alphard 45.8 Minivan, Cab Wagon 57.2 Wish ～ ～ Vitz 41.8 2 BOX 37.7 Market share (%) 30 40 50 60 70 80 Toyota’s share: for the year 2002 Toyota’s share: January to September, 2003 16
a. Sales Strategy: Japan Reorganization of sales channel and Lexus introduction - Toyota brand: 5 → 4 channels - Lexus brand: New introduction Price range Future positioning From August 2005, 180 dealers / 4 models Tradition Toyota dealers: Luxury vehicles Toyopet dealers: Medium-sized vehicles New Netz: Corolla dealers: Compact vehicles Develop new market segment Advanced / (from spring of 2004) originality Areas to be changed 17
b. Building Global Development and Optimum Production Systems Pursue optimum product lineups by region Core models Core models Corolla Corolla Camry Yaris/Vitz Camry Tacoma Tacoma Previa/Estima Avensis Hilux Avensis Region-specific models Region-specific models 18
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